Early Market Talk March 23, 2020

Emtheader

Coronavirus remains front and center in the news. Johns Hopkins University data shows the US with the third highest number of cases at over 35K with 471 deaths.

Dow futures 18,509 off 531 points at this writing. Grain and oilseed markets finding some footing?

At 0600 CK20 off just a ¼¢ after showing a nickel drop overnight. Eroding ethanol crush margins and plant closing / slowdowns continue to weigh on demand sentiment. SK20 initially lower but reversed higher in the first few minutes of trade. SK20 sits 7 ½¢ higher at $8.70. KC and Chi wheat showing double digit gains.

SK20 trading 50¢ of its recent low helped in part by surging meal values and recent Chinese business. SMK hit a high of 333.00 overnight and $37.00 off its low just last Tuesday.

Gap between $8.88 ½ and $8.85 the upside initial price target for SK20.

Trendline resistance just above that level. RSI running toward overbought territory. Stock use ratio continues to suggest soybeans are running in undervalued territory as well.

Brazil soybean harvest pushing 80% complete and export values there well under US origin. Last week’s Chinese purchases a nod to the phase one trade deal or the beginning of a much bigger program. My suspicion is the former.

Adjusted for CFTC data Friday, we have Funds net short 106K contracts. Late week buying in soybeans have them near a net even position.

Dryness to persist in southern Safrina corn areas in Brazil.

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